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KREG Assists Connecticut Hospitals with Medicaid Financial Impact Analysis

The combination of KREG’s Strategic Services Group reimbursement knowledge and our claim and contract management system, EV-CMA,  powerful simulation capabilities were recently showcased in Connecticut. Many hospitals are struggling with determining the financial impact of proposed changes to the state’s Medical Assistance Program (CT Medicaid), and KREG's Strategic Services Group used EV-CMA to simulated the proposed Medicaid contracts for an exclusive group of Connecticut hospitals. 

The proposed changes to Medicaid reimbursement required hospitals to bill all laboratory services and outpatient surgery services with the revenue center code plus the appropriate ®CPT code(s). Albeit a rather simplified explanation, the reason for this shift in bill practices was to allow for proposed move from revenue code percent of charge reimbursement to either ASC or APC reimbursement methodologies, both requiring CPT code detail. The major question each hospital needed to answer was “What is the financial impact of the proposed changes on my organization?” and this is where KREG’s EV-CMA Contract/Claims Management solution provided vital analysis.

Working in conjunction with participating hospitals, KREG’s Strategic Services Group imported appropriate claim detail which contained line item CPT code(s) as well as actual payments and adjustments that produced baseline contract validation. After building the baseline Medicaid contract to establish the current payment percentage (shown as the red line in the Figure 1.a graph below), KREG staff then modeled a series of proposed contract simulations in EV-CMA to determine the financial impact of proposed changes (with and without wage index adjustments as per the policy transmittal) as well as revenue neutral positions on the same claim set. With the summary report information provided from KREG’s consultants hospital finance staffs learned of the financial implications of moving to ASC and APC reimbursement for Medicaid OP Surgery and Lab Services, as well as what conversion factors would be required to remain revenue neutral.

“So far, all of the hospitals we worked with have seen a negative financial impact on proposed changes to current CT Medicaid Reimbursement, with ASC’s having a far greater impact than APC’s” noted Justin Rozen, KREG Strategic Services Senior Consultant.

If you would like more information on how KREG can assist your organization with contract simulations please contact Justin Rozen at (203) 762-2268 or jrozen@kreg.com.

Figure 1.a

CT hospitals medicaid

®CPT is a Registered Trademark of the American Medical Association

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